What is a blue folder in Xcode

Question

I have opened a project from Github, which has blue folders in its file structure.

As far as I understand this is a physical folder reference rather than just a mean

Answer 1

When folder structure is managed outside of XCode (for example, a cross-platform project which has project files for different versions of XCode, Visual Studio and other IDEs, all using mostly the same directory tree), you normally want folder references. Otherwise one would have to recreate every project file every time folder structure changes.